Jan 21, 2020 (China Knowledge) - Hong Kong’s Equity market saw the biggest daily decline in more than a month on Monday, attributed to profit taking ahead of pre-holiday such as the Lunar New Year. Meanwhile, pharmaceutical and technology companies continues to pump the China markets.
The Hang Seng Index fell by 0.9% to close at 28,795.91, its biggest daily loss since Dec 4. “All good news has come out already, and there is not much stimulus that the market can expect in the near future,” said Alan Li, portfolio manager at investment management firm Atta Capital.
Pre-holiday profit taking is also dampening the market, while the Chinese central bank’s decision to keep its benchmark loan prime rate unchanged has disappointed some investors, Li said. He expected the Hang Seng Index to consolidate at the 28,500 points level.
However, stocks listed in Shanghai and Shenzhen advanced, having a strong start to a shortened trading week before the Lunar New Year holiday in China. The Shanghai Composite Index rose 0.7% to 3,095.79, for its largest daily gain in five sessions. The Shenzhen Component Index increased 1.5%. The ChiNext Index of start-ups listed in Shenzhen soared by 2.6% to a three-year high of 1,982.18.
“It’s been a trend since August 2019 that when the property cycle goes downward, growth stocks will outperform,” said Yang Xiaolei, a Shanghai-based independent market analyst.
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